Theresa May delays Hinkley nuclear decision amid concerns over Chinese involvement
By Paul Homewood
A few further thoughts to add to the Hinkley saga.
Last Sunday, the Telegraph interviewed Tim Yeo, (yes, him), who has now set himself up as a lobbyist for nuclear power. He suggests we should be looking at cheaper options with already proven technology (while still going ahead with Hinkley).
One wonders why he was not recommending these alternatives, when he was still on the Select Committee. (But as has been pointed out, he was not being paid to then!):
Russian, Chinese and South Korean nuclear companies should be offered subsidy contracts to build reactors in the UK if they are cheaper than other projects already under development, a prominent nuclear lobbyist has said.
Tim Yeo, the former chairman of the House of Commons energy select committee, said EDF’s proposed £18bn plant at Hinkley Point, which is expected to get the go-ahead this week, should be allowed to proceed, but he urged the Government to rethink its approach to future projects.
Tim Yeo in his Westminster office Credit: Geoff Pugh
The Japanese-owned Horizon and Franco-Japanese NuGen consortia are both developing plans for reactors at sites in the UK and hope to secure approval for their technologies and subsidy deals from the Government.
Mr Yeo, the MP for South Suffolk for 32 years until the 2015 general election, now chairs New Nuclear Watch Europe, a lobby group whose members include the Korean nuclear firm Kepco. He urged the Government to “urgently examine which nuclear vendors can deliver the cheapest electricity, maximise the number of UK supply chain jobs and minimise the risk of construction delays”.
Mr Yeo highlighted the “progress being made towards much cheaper nuclear generated electricity by China, Russia and Korea”, adding: “The Government should compare what all these companies, together with Horizon and NuGen, can offer.” If other offerings were significantly better, their technologies should be fast-tracked through the regulatory approval process and sites allocated to them, he said.
Meanwhile, today the Telegraph report that the reason the govt is delaying its decision is because of concerns about Chinese involvement:
Theresa May has put off a decision about Britain’s first new nuclear power station in a generation amid concerns about China’s involvement.
Nick Timothy, Mrs May’s joint chief of staff, has previously heavily criticised George Osborne’s attempts to secure Chinese “gold”, which he said was buying British silence on human rights abuses.
He suggested that the expected involvement of Chinese state nuclear companies in the deal could enable China to “shut down Britain’s energy production at will”.
I doubt whether the Chinese will be too pleased. As the Telegraph goes on to comment:
The Telegraph understands that the chairman of CGN [the Chinese nuclear firm], He Yu, had flown to Britain this week in order to sign the deals in Somerset. A "VIP" event to celebrate the deal had been planned for Friday, with a marquee erected at the site ready to host dignitaries.
Like EDF, Mr He and a delegation of Chinese officials were taken completely by surprise at the last-minute change of plan, which only emerged in the course of Thursday.
More news also on the resignation of Gerard Magnin, EDF board member:
A board member of EDF has quit ahead of its meeting to approve the Hinkley Point nuclear plant, calling the project "very risky" and suggesting it could drag the French utility giant into an "abyss".
In a resignation letter seen by Reuters, Magnin said he had expected EDF’s strategy to move towards renewables but instead it was pursuing more nuclear power.
"As a board member proposed by the government shareholder, I no longer want to support a strategy that I do not agree with," Mr Magnin wrote.
He said the Hinkley Point project was "very risky". Areva, the company that is due to be make the reactors for Hinkley, had to be bailed out by the French state earlier this year, with EDF taking on the reactor-making division.
"Let’s hope that Hinkley Point will not drag EDF into the same abyss as Areva," Mr Magnin said.
Talking of finances, one issue that nobody seems to have mentioned yet is the fall in the value of sterling post Brexit. This will mean that EDF will be paid much less in Euros, once electricity is being produced, which admittedly is a long way away, if ever. While much of the cost of construction will be paid for in sterling, there will be an element of Euro transactions, such as the reactors.
Recent devaluation is therefore one more risk to the profitability of Hinkley.
And finally. The Telegraph provide a helpful timeline of events, reminding us that, back in 2008, EDF was telling investors that Hinkley Point would be producing electricity at a cost of £45/MWh, rather than the current price of £92.50.
Which hardly inspires confidence!